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"When Columbus sailed across the Atlantic, he didn't have a business model." -- Intel chief Andrew Grove, telling the Davos economic forum how hard it is to plan in the fast-moving high-tech realmEDITED BY LARRY LIGHTReturn to top

PERELMAN STILL MARVELS WALL STREET

HERE'S ANOTHER REASON why Ronald Perelman is so rich. When he zapped bondholders in his Marvel Entertainment bankruptcy deal, Wall Street buzzed that he would have trouble raising capital in the future. Even Perelman's lieutenants admit they were leery about the reception that the swashbuckling billionaire would get in the market.

But a month after the Marvel fracas, he confounded the skeptics by easily raising $500 million for another of his holdings, California Federal Bank, a San Francisco savings and loan. The preferred-stock issue was heavily over-subscribed. Sighs Phelps Hoyt, an analyst at KDP Investment Advisors: "The market has a short memory."

At issue: Perelman on Dec. 27 put Marvel into Chapter 11 and is trying to push through the court a restructuring plan that would reduce the bondholders' claim on Marvel stock from 80% to 16% so he can retain control. Carl Icahn and other large Marvel bondholders denounced Perelman, who reasons his plan is fair since he's putting fresh capital into the comic-book company. Helping Perelman's cause with the California Federal (formerly First Nationwide) issue is the fact that the thrift, unlike Marvel, is profitable. But his critics warn that other, less-solid Perelman companies might get the Marvel treatment.By Sam Zuckerman EDITED BY LARRY LIGHTReturn to top

ZUCKERMAN'S REIT STUFF

MORT ZUCKERMAN, BEST known as a publishing magnate, earned his original fortune in real estate. Now, Zuckerman is about to take his property empire public, say people familiar with the deal. Wall Street analysts expect his Boston Properties will raise $400 million-plus by becoming a real estate investment trust (REIT).

Boston Properties hasn't filed the offering yet. But sources say Zuckerman (owner of U.S. News & World Report, the New York Daily News, and the Atlantic Monthly) intends to stay on as head of the real estate outfit he founded in 1970, retaining an unspecified controlling interest. The fresh capital will go mainly toward expanding Boston Properties' holdings, now 12 million square feet. This is mainly Class-A office space with high occupancy rates in Boston, New York, and Washington. Its flagship is in Manhattan--the 47-story, aqua-colored tower at 53rd Street and Lexington Avenue whose chief tenant is the Shearman & Sterling law firm.

REITs are hot now, so this is a propitious time to go public. In 1996, their average total return was 35%, vs. 22.9% for the S&P 500. Numerous private real estate concerns are taking advantage of this and converting to REITs lately, with Zuckerman's among the largest.EDITED BY LARRY LIGHTReturn to top

PAY-TELLY'S WORKING-CLASS HERO?

PRESS BARON Rupert Murdoch and his British Sky Broadcasting may have cleverly gotten out of a jam. Last fall, Sky's stock price was bashed by regulatory fears and peaking satellite sales. So Murdoch joined with Carlton Communications and Granada Group to bid for a franchise in something called Digital Terrestrial Television. Their main rival is International CableTel, Britain's No.3 cable operator.

With DTT, signals come in through an ordinary home aerial and are decoded through a set-top box. BSkyB, a satellite and cable programming supplier, could boost its market share, since DTT is aimed at the 75% of British homes that now lack those services. So BSkyB's stock is up roughly 35% from December's low.

Politicians praise the BSkyB consortium for seeking to make digital available and affordable to all. It would air pay-TV on half of DTT's 30 channels.By Stanley Reed EDITED BY LARRY LIGHTReturn to top


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